Question
The most recent financial statements for Anderson Company are shown here: Income Statement Balance Sheet Sales $ 60,600 Current assets $29,100 Long-term debt $ 63,200
The most recent financial statements for Anderson Company are shown here:
Income Statement Balance Sheet
Sales $ 60,600 Current assets $29,100 Long-term debt $ 63,200
Costs 25,000 Fixed assets 123,500 Equity 89,400
Taxable income $ 35,600 Total $ 152,600 Total $ 152,600
Taxes (22%) 7,832
Net income $ 27,768
Assets and costs are proportional to sales. Long-term debt and equity are not. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio.
What is the maximum increase in sales that can be sustained assuming no new equity is issued?
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